Purchasing capital assets is an integral part of every business. Whether the purchase be for a replacement, or for future sustained growth, you have put in the time researching, testing, and comparing countless pieces of equipment to find the one that best fits your business. Now here comes the fun part… the actual transaction of purchasing the equipment.
There are two primary ways to purchase equipment: cash or financing. Perhaps you want to avoid the headaches of dealing with the bank and going through the long drawn out process of financing, so you purchase the equipment in cash. There is nothing wrong with purchasing your equipment in cash. However, there are many benefits of financing equipment. Additionally, financing equipment with a reputable financial services company is a simple and easy process. Within 48 hours, you can have the equipment purchased and contributing to your bottom line. Below is a step-by-step guide to lead you in the process of getting your equipment financed.
Step 1: Find a commercial lender.
Seems simple enough. However, there are hundreds of financial lenders to choose from. Picking the wrong one will exponentially increase the hassle. Not only that, but fraudulent businesses have unfortunately been known to target the financial services sector. Do your research, google reviews, ask your dealer for recommendations, and avoid sending any up-front payment charges. The best advice? Pick a company that has been in business long-term, has the experience, and has many satisfied repeat clients. Finding a trusted lender is the most important part of the financing process.
Step 2: Supply the necessary documents for underwriting
Many finance firms provide “app only” offers for their customers. However, you should be wary of application only packages. Long story short, a typical credit package includes:
- 2 years most recent business tax returns and/or personal tax returns
- Business Financial Statements (current balance sheet, income statement, & cash flow)
- Personal Financial Statement
- Equipment Invoice
Ultimately, the goal is to use this information to paint the full credit package. Oftentimes, additional information allows lenders to offer you better options (less money down, lower rates, longer terms, etc.).
Step 3: Wait for a credit decision
Once you have sent in all of your credit information, all you need to do now is relax and wait! Typically, a successful financial services company will provide you with a credit decision within 24 hours… Sometimes even sooner!
Step 4: Work out payment details
Once you have accepted an approval, the lender will typically ask for the equipment dealer’s contact information. They will use this information to work out all the payment details in advance, so all you’ll need to do is pick up the equipment (or wait for the scheduled delivery).
Step 5: Make regularly scheduled payments
Pay off your equipment as agreed upon in the approval. Most lenders will accept ACH payments or checks. A good lender will check back with you after the first month just to make sure everything is running smoothly and to see if you have any additional questions.
Need additional resources? We can help! With over 30 years of experience, we know the financing process front-to-back, and we’ve helped many businesses grow with our expertise. Call SLS Financial and we will gladly help guide you through the financing process.